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A mortgage for the future

Some New York parents are taking out loans to pay for day care. We need that option, too.

Illustration by Jason Ford

Every month my husband and I steel our resolve: Time to write the day-care check. And we’re not alone in feeling the pinch. According to a 2012 report by Child Care Aware of America, Massachusetts has the costliest child-care centers in the country. Full-time care here averages $15,000 annually for infants and $11,000 for 4-year-olds. That’s more than yearly tuition at many public colleges.

It’s no wonder then that lots of people make the financial decision to quit their jobs and become stay-at-home parents. “I love my job, but it doesn’t make sense for me to continue to work,” a parent expecting twins observed online recently.


But staying home has its costs, too. If the parent one day decides to reenter the 9-to-5 workforce, he or she could be behind in everything from promotions to 401(k) contributions. (For single parents, of course, opting out of the workforce can be next to impossible.)

In August, New York City — known for its own soaring child-care expenses — launched a unique program that finally acknowledges that, for many, the tipping point of work-family balance is money. The Middle Class Child Care Loan Initiative, a pilot program run by the city, lets creditworthy parents take out subsidized early child-care loans of up to $11,000 a year at 6 percent interest. Parents have to make between $80,000 and $200,000 a year — that’s middle class in New York, apparently — and kids have to be between 2 and 4. “Early childhood education is one of the most important investments a parent can make,” City Council Speaker Christine Quinn said in a statement.

Going into debt for a person in diapers might sound crazy. Between mortgages, car payments, and student loans, plenty of folks are already stretched thin. Writing in this space, Jim Braude just tackled how untenable college costs have become across the country. And they’re projected to get worse. Campus Consultants, a financial-aid consulting firm, estimated in 2012 that when newborns arrive on campus in 2029, tuition could be as much as $130,428 a year for a private four-year college and $57,609 a year for an in-state public.


At least when it comes to paying for college, though, families typically have alternatives to loans, including scholarships, work-study, and 529 savings plans. In contrast, parents tend to pay upfront for day care and preschool. And while they have time to save for college, early care is an expense that typically arrives when money is tighter. “Parents with young kids tend to be young themselves, and we know that earnings and careers grow with age,” says economist Greg Duncan, an education professor at the University of California, Irvine. “Affording things like high-quality child care is problematic at that stage.”

Most people would agree that a college education is important — “higher education is still the best ticket to upward mobility in America,” President Obama said recently — but day care doesn’t get the same good PR. “People think of day care as ‘care,’ and a lot of early education is about care, but it is also about development and education,” says Eleonora Villegas-Reimers, an associate professor at Wheelock College who serves on the board of the Massachusetts Department of Early Education and Care. “The first five years are huge in terms of socioemotional and organizational skills.”

Important enough to justify a loan? Possibly, when considering that the debt could be an investment in both the child’s education and the parent’s career.


By letting a parent pursue upward mobility at work, a short-term loan could provide a long-term return on investment. As that parent of twins suggested, affordable child care can be the difference between solidifying a career and leaving the job market altogether.

I’m not saying loans are right for everyone or that being a middle-class parent is the toughest thing in the world. In Massachusetts, more than 24,000 kids from low-income families are languishing on waiting lists for vouchers to get subsidized care. Rather than considering the possibility of one parent leaving the workforce, many parents of these children are juggling several jobs. (“Congratulations, America! Only the Rich Can Afford to Have Kids in You,” Slate half-joked not long ago.)

The good news is that child care is now being framed as something integral to many working family’s lives — and budgets. Which is why “we should facilitate genuine choices,” says Duncan. “One is to make loans available to more easily finance these [child-care] options. Another is through leave policy, maternal and paternal, to try to make real choices about the timing of returning to work available to middle-class parents.”

And that’s the real key. We need to think bigger when it comes to making early care accessible for all families that need it, because it’s beneficial to kids’ development and can be helpful for parents’ careers. Ultimately, New York’s loan is a short-term Band-Aid. But at least it’s started a discussion reframing early care’s importance — and acknowledging that the tuition pinch starts long before the first day of college.


Kara Baskin writes frequently about family life for the Globe. Follow her on Twitter @kcbaskin. Send comments to